Budget, Debt, and Deficits

“Although short-term debt poses one of the greatest threats to the financial stability of the United States, Dodd-Frank has done little to mitigate it. Fortunately, several experts have proposed ambitious ways of dealing with the problem, including expanding federal insurance of bank deposits, allowing the Federal Reserve to lend money to more firms in the case of a panic, and banning unregulated financial institutions from issuing runnable liabilities,” writes Robert E. Litan.

The core of any deal to address Puerto Rico’s imminent debt default long has been clear: strong fiscal oversight, paired with powerful tools to facilitate a necessary debt restructuring. But oversight should not overreach, and the new restructuring tools should respect the differences created by existing contracts. The legislation (PROMESA) that emerged from the House achieves the needed balance; it needs to pass the Senate quickly.

In his testimony before the Senate Committee on Foreign Relations, CFR President Richard N. Haass discussed the “slow motion crisis” that is growing U.S. debt, as well as its principal causes and its consequences for U.S. national security.

Last week, Nigeria’s Senate passed President Muhammadu Buhari’s proposed 2016 budget, which projected a deficit of $15 billion due to falling oil prices. In an email interview, Matthew Page, an international affairs fellow at the Council on Foreign Relations, discussed the impact of falling oil prices on Nigeria’s economy and politics.

Africa’s largest economy is struggling to find its feet. Sliding oil prices threaten to derail President Muhammadu Buhari’s efforts to put Nigeria’s public finances back in order, fund planned infrastructure spending, and field much-needed social programs.

Renewing America

Issued by the Office of Management and Budget, the Budget of the United States Government is a collection of documents that contains the budget message of the President, information about the President's budget proposals for a given fiscal year, and other budgetary publications that have been issued throughout the fiscal year. Other related and supporting budget publications, such as the Economic Report of the President, are included, which may vary from year to year.

Renewing America

The U.S. government faces an unsustainable long-term debt trajectory. This Progress Report and Scorecard outlines the factors affecting federal debt and suggests options for policymakers to address the impending crisis.

Under President Muhammadu Buhari, the fight against corruption in Nigeria has unquestionably turned a corner. Shortly after taking office in May, he vowed to “plug revenue leakages”, made sweeping changes in the notoriously corrupt Nigerian National Petroleum Corporation (NNPC), and took steps to tighten control over public spending.

Kenneth S. Rogoff, a Harvard University professor and former chief economist at the International Monetary Fund, will contribute his expertise to the Council on Foreign Relations as a senior fellow for economics in the Maurice R. Greenberg Center for Geoeconomic Studies. He will continue to be the Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University.

Council on Foreign Relations Senior Fellow Robert Kahnbreaks down the deal and explains what it means for the future of Greece and the European Union. Greece reached an agreement with European creditors that would impose harsh austerity measures in return for a financial bailout.

In September 2008, when Chinese President Hu Jintao got word that Lehman Brothers, then the fourth-largest U.S. investment bank, was on the verge of bankruptcy, he was traveling by van along the bumpy roads of Shaanxi Province. Surrounded by policy advisers and members of the Politburo, Hu asked them how China should respond to the inevitable spillover.

Five years after the onset of its sovereign debt crisis, Greece once again finds itself on the precipice of default and a departure from the nineteen-member eurozone. This reading list provides expert background and analysis of the crisis.